Investing.com - The euro erased losses against the U.S. dollar on Tuesday, easing off a one-week low as better-than-expected German and euro zone data supported demand for the single currency.
EUR/USD eased off 1.3128, the pair’s lowest since February 7, to hit 1.3198 during European afternoon trade, edging up 0.09%.
The pair was likely to find support 1.3088, the February 7 and resistance at 1.3283, Monday’s high.
The euro strengthened after data showed that German economic sentiment improved significantly more-than-expected in February, turning positive for the first time since May 2011.
The ZEW Centre for Economic Research said that its index of German economic sentiment improved to 5.4 in February, compared to January’s reading of minus 21.6. Analysts had expected the index to improve to minus 11.6 in February.
Meanwhile, economic sentiment in the euro zone rose in February to minus 8.1 from minus 32.5 in January. Economists had expected euro zone economic sentiment to improve by 11.4 points to minus 21.1.
But the euro’s gains were limited as downgrades in European countries weighed on investor confidence.
Earlier in the day, Moody’s Investors Service cut the debt ratings of six European countries, including Italy, Spain and Portugal, and said it may strip France and the U.K. of their top Aaa ratings, citing the euro zone’s debt crisis.
The single currency was also higher against the pound with EUR/GBP rising 0.17%, to hit 0.8378.
Later in the day, the U.S. was to release official data on retail sales, as well as reports on import prices and business inventories.
EUR/USD eased off 1.3128, the pair’s lowest since February 7, to hit 1.3198 during European afternoon trade, edging up 0.09%.
The pair was likely to find support 1.3088, the February 7 and resistance at 1.3283, Monday’s high.
The euro strengthened after data showed that German economic sentiment improved significantly more-than-expected in February, turning positive for the first time since May 2011.
The ZEW Centre for Economic Research said that its index of German economic sentiment improved to 5.4 in February, compared to January’s reading of minus 21.6. Analysts had expected the index to improve to minus 11.6 in February.
Meanwhile, economic sentiment in the euro zone rose in February to minus 8.1 from minus 32.5 in January. Economists had expected euro zone economic sentiment to improve by 11.4 points to minus 21.1.
But the euro’s gains were limited as downgrades in European countries weighed on investor confidence.
Earlier in the day, Moody’s Investors Service cut the debt ratings of six European countries, including Italy, Spain and Portugal, and said it may strip France and the U.K. of their top Aaa ratings, citing the euro zone’s debt crisis.
The single currency was also higher against the pound with EUR/GBP rising 0.17%, to hit 0.8378.
Later in the day, the U.S. was to release official data on retail sales, as well as reports on import prices and business inventories.